IRS Garnishments

Although IRS garnishments can be pretty devastating, there's some good news that may help. I remember getting a frantic call from a consumer who had just experienced an IRS garnishment of his wages. He had a delinquent income tax obligation that he didn't pay.

The IRS sent him several collection notices that he ignored. They then sent him a notice to pay the tax liability within 10 days or they would levy his assets (i.e. take his money from his bank accounts and/or garnish his wages). Although the notice was pretty frightening, he stilled failed to contact them. He thought he would wait until he could pay the taxes in full and then get in touch with them.

Well, a few weeks later he went to work and instead of receiving his paycheck, he got a notice of garnishments from his employer. He was devastated. He then contacted the IRS to see what he could do about it. Then he called me to see what he could do about it and how it would affect his credit.

If you owe delinquent taxes to the IRS you should know that the IRS can legally seize the money in your bank accounts as well as garnish your wages and other real or personal property.

Usually, before they proceed with levying your assets, they will send you a notice to respond within 10 to 30 days depending upon the type of tax liability you owe. If you ignore their final notice of intent to levy, they will proceed with serious collection activity, including garnishments of your bank accounts and wages.

The amount of the garnishments can vary, but it could range from 30% to 70% of your paycheck, which can be a pretty financially devastating matter. So do not ignore their notices. Contact them yourself or hire a tax professional for help.

Here's The Good News

If you receive garnishments you can contact them and enter into a direct debit installment agreement and request to have the IRS garnishments removed. This is all part of the Internal Revenue Service's new efforts to help struggling tax payers.

Also, as a part of their collection process, the IRS may file a tax lien that shows up on your credit reports. The IRS tax lien can have a significant negative impact on your credit scores. However, you can legally remove IRS tax liens from your credit reports prior to paying the full amount of taxes owed.

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